Loan to SIUC draws concern in Edwardsville

The Southern Illinois University-Edwardsville campus. SIUE is now helping out its sister campus, SIU-Carbondale, with budget deficits. (Photo courtesy of Southern Illinois University)

The Southern Illinois University (SIU) Board of Trustees, May 10, unanimously approved the transfer of up to $35 million from the reserve fund of SIU-Edwardsville (SIUE) to the coffers of SIU-Carbondale (SIUC).

The move came as SIUC faced a growing budget deficit that would have then school operating in the read as early as this month, according to SIU System President Randy Dunn.

However, the fund transfer has drawn concern from the SIUE Faculty Association, which notes their campus over the course of several fiscal years has implemented a series of sometimes painful spending cuts to help ensure fiscal stability.

Southern Illinois University System President Randy Dunn.mugshot – Randy Dunn – SIU President

They say SIUE is now effectively being asked to bail out SIUC, which has yet to balance its budget.

SIUC has already exhausted its own reserves fund, as well as a previous loan from the SIU Springfield School of Medicine — together totaling $83.3 million.

The loans will come from the SIUE reserve fund which currently stands at about $70 million, according to administrators.

Both SIU trustees and the SIUE faculty say the university system’s fiscal problems are in large part a result of the State of Illinois’ now two-year-old budget crisis, which has resulted in an unsteady stream of state support to universities.

However, in a letter to the SIU system trustees last week, SUE faculty also blame SIUC’s financial problems on poor decisions by past administrators.

“The faculty at SIUC are not at fault. The fault here is with past leadership at both the state and university levels, who turned a blind eye and made poor choices,” the SIUE Faculty Association asserts in its letter.

The letter was also sent to university officials as well as Illinois Gov. George Rauner and several state legislators.

Trustees for the SIU system had originally planned to approve the fund transfer at their April meeting, but delayed a vote after Edwardsville faculty raised objections.

Unlike kindergarten-through-12th-grade public school districts, public universities are not authorized under Illinois law to borrow money to meet ongoing operating expenses, Dunn notes.

Without the new loan from SIUE, the only way SIUC could financial obligations this month would be to use dedicated money from restricted grants and bonds, university officials say. That would probably be illegal, they note.

The SIU Trustees approved the fund transfer last week following a three-hour closed session during which faculty and staff from SIUE, as well as SIUC administrators, spoke.

In the end, the trustees approved the new inter-campus line of credit with provisions demanded by SIUE faculty in their letter last week to help minimize the financial risk to their campus.

Funds transferred to SIUC will be capped at a total of $35 million. SIUE faculty had feared SIUC would seek the entirety of the $70 million in Edwardsville campus’ reserve fund.

SIUC administrators are required to make repayments of any fund transfers their top financial priority once state funding its normalized.

Dunn has already ordered SIUC faculty and administrators to submit a proposal for $30 million in cost cuts by July 1. The directive came in a March 29 letter, in which Dunn first proposed a transfer of roughly $30 million from SIUE to SIUC.

The $30 in new cuts on the Carbondale campus would come on top of $12 million in budget reductions over recent years.

Meanwhile SIUE is currently in the process of cutting $4 million from its budget — following its own $12 million in cost reductions over the past several years. Spending cuts have already reduced SIUE’s total annual budget by 9 percent, the faculty letter notes.

The SIUE faculty has not had a pay increase in four years; with salaries for some full-time tenure-track professors now well below the pay levels at similar universities.

Class sizes at the university have increased, the faculty association also notes. Teaching assistant and graduate assistant positions have been eliminated. Telephones have even been removed from faculty offices as a cost-savings measure.

Additionally, some faculty members are effectively without health insurance, the faulty association says. Many area health care providers and health product vendors have stopped participating in the State of Illinois employee health insurance program due to payment issues, according to the faculty association.